January 25, 2008 - Murray Kessler, President, Chief Executive Officer & Director (Q4 2007 Earnings Call - 1/24/2008); Marlboro snuff; when Philip Morris USA announced an Atlanta rollout into our category last August 2007 there was much speculation that the competitive dynamics would shift for both us and the category. While we appreciated investors concern we believe the street had underestimated Copenhagen and Skoal’s brand equities (each worth more than $1 billion at retail - TW). Clearly Marlboro is a great cigarette brand. That said, history clearly shows that it is difficult to extend brands from one category to another particularly in one such as ours where the existing brand equities are so ubiquitous. The Copenhagen and Skoal equities are proving their loyal consumer following and while it is still early our brands are as strong as ever for perspective UST’s premium brands in Atlanta are growing at a 3.4% rate following Marlboro’s launch which is above the national average and category growth has remained strong. We were able to achieve this with a response to their launch that was measured and in no case included lowering prices. Furthermore, this was achieved despite the fact that Marlboro promoted down to a deep discount level of $1.49 a can. Said simply, what we see in the marketplace so far is similar to what has been written by several sell side analyst. So, while again it is early, we agree that this new entry is not a game changer for the snuff category and we remain confident in our ability to keep growing. (UST Inc. Q4 2007 Earnings Call Transcript, January 24, 2008) It has been found that brand loyalty is even stronger than a good promotion. Nearly 7 out of 10 adult consumers will go to another store if their brand is out of stock. (TobaccoWatch,org) Philip Morris USA continues to Stumble in the Smokeless Tobacco ArenaRead more...

January 25, 2008 - (a wholly owned indirect subsidiary of British American Tobacco(BAT))announces today (1/24/2008)that in late January 2008 Ottawa will be the site of the Company's next test market for its Swedish-style snus smokeless tobacco product. The Company introduced its first snus test market in Edmonton last September. As written by Imperial the most effective way to avoid the risk of long term chronic disease possibly ending death is not to use any tobacco products. (Imperial Tobacco Canada expands harm reduction program with start of SNUS test market in Ottawa, Canadian Business Online, 1/24/2008) Snus will be available starting Monday(1/28/2008) at about 200 stores across Ottawa, one snus pouch has 0.4 grams of tobacco, a tin of 20 pouches is expected to sell for about 80 per cent of the price of a pack of premium cigarettes. The Imperial spokesperson was unable to say how well snus is selling in Edmonton. "Its hard to tell at this point how consumers are reacting to it because it's such a small test market and the level of awareness is relatively low," she said. If snus sales are anything like in the U.S. - they must be poor, e.g, Marlboro SNUS. Health Canada has said snus products are not safe alternatives to cigarettes. The ministry notes it is addictive and can cause serious health problems. ( "Critics raise alarm over smokeless tobacco" by Thulasi Srikanthan, The Ottawa Citizen, 1/25/2008) So why let these tobacco market tests continue?? See related news briefs: October 29, 2007, October 4, 2007, October 4, 2007September 12, 2007 and May 8, 2007. Read more...

January 23, 2008 - The House of Representatives failed on Wednesday (1/23/2008)to override a veto of a proposal to expand the State Children's Health Insurance Program (SCHIP) by $35 billion over five years to $60 billion. The vote, 260-to-152, missed the two-thirds majority (15 votes short) needed to override the president's veto. Only one Democrat, Jim Marshall of Georgia, voted against the override. Last year the House failed to override a veto of a very similar bill. An extension of the current SCHIP program has been approved through March 2009. (Ruth Marshall, MarketWatch.com) See related news brief: Congress Sends An Extension of the SCHIP to President Bush.

January 23, 2008 - Still sucking our youngsters in.. This is National Non-Smoking Week in Canada. Almost 200,000 Quebecers quit smoking last year but the tobacco companies continue to lure youngsters with gimmicks like flavored cigarettes (tinged with alcohol and food flavors), the province's director of public health, Dr. Alain Poirier said. Consumption of cigars and cigarillos is on the increase among high-school students. In 2006, about one student in five (22 per cent) tried one of these products. The flavored cigarettes can be bought individually or in slickly designed packs of four. A single smoke sells for $1.50 plus tax. The tobacco companies are looking for ways to attract youth, which is perverse, because (by law) they aren't allowed to sell tobacco products to young people. Another product, called snus, which is placed between the gum and upper lip but not chewed or swallowed, is being produced by Imperial Tobacco Canada. Quebec actress Mireille Deyglun, spokeswoman for the anti-smoking week, knows first hand the dangers of tobacco. Her father, brother and two cousins died of lung cancer, and she smoked from the age of 12 before quitting in 1996 at the age of 37. A study by Canadian researchers published last August concluded that the risk of heart attack was equally serious whether tobacco is smoked, chewed or used in a water pipe. ("Still Sucking 'em in" by Sue Montgomery, The Gazette, January 21, 2008) Canada should be concerned with less tobacco smell cigarettes that have been recently introduced. (TobaccoWatch.org) Related news briefs: Quebec Teens Switch from Cigarettes to Cigarillos, Hookah is worse than smoking cigarettes and du Maurier SNUS. Click on image to enlarge..

January 22, 2008 - Profile America --- You may think the debate over smoking is fairly recent. But 100 years ago this week, the New York City council passed an ordinance that made it illegal for women to smoke in public. The ordinance was the result of a campaign by the National Anti-Cigarette League, the first to use the term "coffin nails" for cigarettes. At the time, a number of cities had banned smoking, along with the states of Arkansas, Iowa, Idaho, and Tennessee. All of these laws were revoked by 1917, since they were not only difficult to enforce, but added to the allure of smoking. Now, just under 21 percent of adults in the U.S. currently smoke. The highest proportion is in Kentucky, at 28 percent. The lowest is Utah at 11 percent. You can find these and more facts about America from the U.S. Census Bureau on the Web at www.census.gov. Recently, an excellent article on Women and Smoking by Cynthia Crossen appeared in Wall Street Journal we subscribe to.Click on image to enlarge..Read more...

January 21, 2008 - Tobacco Friendly South Carolina is considering a series of measures that would ban smoking in indoor, public places, increase the lowest cigarette tax in the nation (now 7 cents per pack) and prohibit adults from lighting up in cars when children are riding along. The proposals may be in for a bumpy ride with big tobacco spending big bucks in the state legislature over the past two years as the debate over cigarette taxes and statewide smoking bans kicked into high gear. "South Carolina considering cigarette tax hike, smoking bans"The Associated Press, 1/16/2008) Three industry groups spent a total of at least $785,000 between June 2005 and the end of the last with legislative session in June 2007. To please tobacco interests several lawmakers filed bills aimed at nullifying the bans by preempting local governments' right to enact the laws. Some lawmakers also tried to cut a break for smokers and create a smoking permit that would allow restaurants or bars to continue to allow smoking for as little as $100. ( "Tobacco groups have spent hundreds of thousands of dollars on lobbying and contributions to lawmakers as the debate over taxes and bans has ignited" by Tim Donnelly, 1/21/2008) South Carolina did pass the The Youth Access to Tobacco Prevention Act of 2006 (Section 16-17-500, as amended, Code of Laws of SC, 1976), effective August 21, 2006 that states that youth under the age of 18 years must not purchase, attempt to purchase, possess, or attempt to possess a tobacco product, or present or offer proof of age that is false or fraudulent for the purpose of purchasing or possessing a tobacco product. A minor who violates this provision may be subject to penalties including a civil fine up to $25, to include all applicable court costs, assessments, and surcharges. (Tobacco Prevention and Control) Click on image to enlarge..Read more...

January 21, 2008 - Pfizer Changes Chantix Label.. Pfizer today (Friday, 1/18/2008) updated the CHANTIX label in the U.S. to include a warning that patients who are attempting to quit smoking with CHANTIX should be observed for serious neuropsychiatric symptoms, including changes in behavior, agitation, depressed mood, suicidal ideation and suicidal behavior. The warning comes nearly five months after a CBS 11 (Dallas - Ft.Worth) investigation uncovered thousands of reports of adverse reactions to the drug. In November, the Food & Drug Administration announced it was reviewing the safety of Chantix, after receiving similar reports to the ones uncovered by CBS 11. Chantix is marketed as Champix in Europe and Australia. In December, CBS 11 reported a similar warning to the one announced today in the United States would accompany packages of Champix in Australia. In the United Kingdom, government medical officials continue to investigate the safety of Champix. In December, CBS 11 reported the number of people in the United Kingdom reporting suicidal thoughts while using the drug doubled in just 60 days. Related news brief: Chantix Reports of Suicidal Thoughts and Aggressive and Erratic Behavior..Read more...

January 20, 2008 - A Finnish ferry will in future sail under the Swedish flag so that it can continue to sell snus, Swedish moist tobacco. The move comes after the European Commission threatened to fine Finland if it did not stop snus sales onboard the ferry M/S Eckerö, which sails between Grisslehamn and Berghamn in Finland's Åland (“Ahvenanmaa” in Finnish)Archipelago. The sale of snus is banned throughout the EU, but Sweden is exempted from the ban. (The Local, 1/18/08) See related News Brief:Takes Finland to Court Again For NOT Banning the Use of Oral Tobacco

January 20, 2008 - Snus could face the same kind of opposition in the U.S. and other markets as it has in Europe. In fact, it was U.S.-based UST's UST push to sell a Skoal-branded line of flavored tobacco pouches in Europe that led to the EU ban. According to a recent report in the Times of London, snus is especially popular among European youth, who can find the product on the black market. A Credit Suisse analysis found that Americans spend $82 billion a year on cigarettes. They spend about $3.2 billion on cigars. That leaves just $3.7 billion for smokeless tobacco products. See related news brief:Our Kids are still our number one priority.